Home Brokers & Agents Magical Thinking vs. Boring Reality

Magical Thinking vs. Boring Reality

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Image: David Spiro

Facebook can sometimes be a gold mine for content. Consider these two seemingly unrelated events:

Marie is a friend who used to work in the real estate industry, as the Director of Marketing for MRIS. She relocated to Florida, and asked me months ago for some agents I knew in the area. I didn’t, so reached out to my friends who did, who promptly came up with a few local REALTORS who are supposedly at the top of their game, rock-solid professionals, top producers, and the like.

You see the result of that above: “Fourth time is a charm.”

What struck me was that on the very same page where I was reading this status update from Marie, I see this ad off to the side:

Look at the copy:

“Top Broker shares unusual marketing strategy for consistent commissions.”

Emphasis is mine.

Why do so many real estate agents spend so much time looking for “unusual marketing strategies”, talking about the latest social marketing tool, spend thousands of dollars or hundreds of hours doing the unique, the unusual, the different, the “this will help me stand out” stuff… and totally miss the basics like, oh, I don’t know… returning a frikkin’ phone call from a possible client?

Because there’s far too much magical thinking and far too little cold hard boring reality going on in real estate.

Magical Thinking and the Real Estate Agent

The above is the perfect example. On the one hand, real estate agents are writing blogposts, doing “strategic Facebook updates” (the phrase itself turns the stomach somewhat), writing Yelp reviews out the wazoo, and spending hours upon hours looking at the latest IDX search tool. They spend thousands on search optimization, even more on paid search marketing, and then pay thousands of dollars to attend various conferences around the country where experts can tell them about the latest marketing techniques combining Pinterest with predictive analytics technology all on your iPad for Real Estate.

Meanwhile, they fail to return phone calls. From actual, live, breathing human beings who want to buy a house.

A friend of mine is a nationally recognized coach and trainer. Names are withheld to protect the semi-innocent. He told me a while back that he has the following conversation with 90% of his coaching clients:

COACH: “So where does your business come from?”

CLIENT: “Well, 9 out of 10 transactions come from past clients and referrals.”

COACH: “Great! So how are you maintaining that relationship?”

CLIENT: “I don’t know. It just kinda happens. But can we talk about integrating Twitter into my marketing strategy?”

Ken Brand, the author of Less Blah Blah and More Ah Ha, talks about how real estate agents spend an inordinate amount of time trying to get in front of strangers, and hardly any time or effort trying to stay in touch with people they already know, people who have actually done business with them, despite all evidence that past clients send you referral after referral.

The thought seems to be that the couple you had a great relationship with, who loves you, who bought a house from you… that’s the people you ignore, and focus your energies on people who are suspicious of you, who think you’re just another one of those shady real estate salespeople who’d do and say anything for a commission check.

This is magical thinking.

Magical Thinking and Sin-dication

The syndication debate, for example, is infested with magical thinking.

The thought appears to be that brokers need to stop syndicating to major portals in order to capture all of the leads from the Internet. The major offense, of course, is the “three-headed monster” in which a listing carries advertising from random-ass agents who paid to appear on those listings.

Well, I’ve done some work for brokerages and top agent teams, and you know what I’ve found? Most of them have more leads than they can handle. The problem isn’t with lead generation; the problem 99% of time is with lead conversion. Internet inquiries flood into a company, gets sent to one of the agents, who promptly ignores it for three days before contacting the potential client. See Above, Marie Still’s experience.

Realogy invested millions of dollars into LeadRouter to try and deal with the lead conversion problem; I haven’t the faintest idea what sort of success they’re having with the program, but the fact that they had to invest that money in the first place points to the bottleneck: conversion.

I speak with colleagues in my line of work — consulting with brokerages and agent teams — and they all say the same thing: the problem isn’t lead generation, the problem is lead conversion. And speak to enough agents-on-the-street and they all say similar things: “Those online leads are crap; they’re not worth working.”

Well then.

Companies from Weichert to Shorewest set up call centers and Internet leads teams specifically to respond in a timely fashion to inquiries from the Web and elsewhere. Agents often think it’s because those brokers just want to take a bigger piece of the pie. While there’s some truth in that, the bigger issue is that brokers often just want the goddamn consumer’s inquiry responded to within a reasonable period of time.

You know who else wants the same thing? The portals. I spoke recently to a senior executive at one of the major portals about the “three-headed monster” problem, and he told me that they’re perfectly willing to get rid of that program if the brokerages would make sure that consumer inquiries get a prompt response. Because the portals think that when a consumer submits an inquiry and has to wait three days to get even an email response, the consumer blames the portal: “Oh man, that XYZ.com is a piece of crap; I sent in a request and no one got back to me.”

Jack Miller of The GoodLife Team had a fantastic video in which he spoke about their company’s brand promise and how Trulia was violating it:

He’s absolutely, 100% correct as far as The GoodLife Team’s brand promise goes. But what about Trulia’s brand promise to its consumers? If every brokerage in America, if every agent in America, was as conscientious about responding to inquiries as The GoodLife Team is, maybe there is no problem at all.

But brokers and agents all over the place thinks the problem is advertising on their listings.

This is magical thinking.

The boring reality is that far too often, brokers and agents are simply do not respond to inquiries in a timely fashion. So here’s a thought: if you’re going to complain about how syndication screws you over, at least show us that (a) you respond to every single inquiry, (b) your response time to inquiries is reasonable (within 24 hours seems reasonable to me), and (c) your conversion rate is something that doesn’t use a decimal point before the number (i.e., if your converting 0.5% of your leads… Trulia ain’t the problem).

Magical Thinking and the REALTOR(R)

Finally, there’s more than a little bit of magical thinking going on with REALTORS(R) — by which I mean the Association of REALTORS(R) from local to state to national.

In virtually every single consumer interaction I have seen doing HearItDirect, not a single person could tell the difference between a REALTOR(R) and a plain-jane real estate licensee. Not a single buyer or seller could say what ePro meant, or GRI, or CRS, or any of the alphabet-soup of designations. Yet, NAR spends millions upon millions of dollars, thousands of manhours, and REALTORS(R) proudly display all those letters after their name as if anybody gave a damn.

This is magical thinking.

Every Association Executive and every single elected leader says that political advocacy is one of the most important pillars of organized real estate. Fighting for property rights, for homeownership, for the American Dream is central to the mission of REALTOR(R) Associations at every level. Or so they say.

Of course, not a single actual homeowner who isn’t related to a REALTOR(r) knows this. Buyers and sellers haven’t the foggiest notion that NAR might actually be up there on Capitol Hill lobbying for their property rights. Voters everywhere have no idea that NAR is anything other than a quasi-labor union seeking to fatten their wallets, no matter how much Association leaders want to tell each other that they are defending The American Dream.

The boring reality is that homeowners won’t know and can’t be convinced that REALTORS(R) are fighting for them unless they are actually told. By REALTORS(R). That they trust. But instead of doing that boring, mundane, slogging-through-the-mud type of work, NAR puts out ads talking about how now is the time to buy a home. And they fret that consumers don’t support them.

This is magical thinking.

Committed REALTORS(R) love to talk about the vaunted Code of Ethics, and how that makes them better than those scumbag lying thieves who have no ethics whatsoever. The fact that the Code of Ethics exists means that buyers and sellers can utterly trust the reliability, integrity, and professionalism of anyone with the blue R logo on her business card.

Nevermind that there isn’t a single Association anywhere I’m aware of who publishes a list of REALTORS(R) who have been disciplined for violating the Code of Ethics. Nevermind that a consumer — whom the Code of Ethics is supposed to protect — has absolutely no way of seeing if the guy he’s talking to has any serious ethics violations on his file or has been accused of violating the Code of Ethics six dozen times in the past year. Nevermind that REALTORS(R) themselves often admit that they don’t bring charges even when they personally witness gross ethical violations because (a) they don’t want to get dragged into a lengthy quasi-legal process, and (b) they might have to do business with that unethical guy at some point. Just live and let live is the modus operandi, but nevermind all that.

Merely the existence of the Code, enforced in secret hearing in star chambers across the land, on the rare occasion that someone actually brings a well-documented ethics violation to the said Super-Secret Star Chamber Judges, should assure the public.

This is magical thinking.

The boring, mundane, painful reality is that until and unless REALTOR(R) means something to the average citizen, because he can see public excoriations, shaming, and expulsion of those who violate the Code of Ethics, the all-hallowed registered trademark is just a R. The boring reality is that until and unless Associations go out and do the hard work of telling homeowners about the issues, and what NAR and the state and local Associations are doing to fight on their behalf, voters will just see NAR as “the real estate lobby” like any other. The boring reality is that until and unless REALTORS(R) make all those designations actually mean something to the actual buyer and the actual seller that they can see, touch, experience in their lives — all of which is not sexy grunt work — we will continue to have consumer after consumer tell our HearItDirect panels that none of those letters mean a thing.

Think Magically If You Want…

But do the boring and the mundane.

By all means, engage in all sorts of fantasy and vision and what-if innovation. Maybe you will hit upon some new unique marketing strategy involving QR Codes and Spotify that would grow your real estate business by 300%. Magical thinking is fun and exciting and challenging and leads to breakthroughs.

But not if you don’t pick up the phone and actually call someone who was referred to you.

Spend a little less time dreaming up the next mobile app for your brokerage, and a little more time getting your conversion rate up from 1.2% to 3%… which likely means the boring, mundane, pain-in-the-ass work of convincing your agents to call that internet inquiry within a couple of hours of getting it.

This has been your soapbox public service announcement from the Notorious ROB Anti-Magic League.

-rsh

PS: Oh yes, for the haters sure to think, “Why don’t you get your license and sell some real estate before opening your yap”… I invite you to unsubscribe from the feed, remove this blog from your bookmarks, unfriend me on Facebook, unfollow me on Twitter, and never come back again. There are literally thousands of real estate blogs written by licensees where you can learn all you need to about unusual marketing strategies to increase your commissions. Go go magical thinking!